Deep tech startups face a level of scrutiny rarely encountered by ventures in other sectors. Long gestation periods, capital-intensive R&D, and uncertainty around speed-to-market often make them harder to assess as viable investment candidates.
In India, this challenge has been compounded by a long-standing policy hurdle: startups were required to operate for at least three years before they could gain financial support from the Department of Scientific and Industrial Research (DSIR).
That barrier has now been dismantled.
Rethinking How Deep Tech Is Evaluated
At the 42nd Foundation Day celebrations of DSIR on January 4, the Centre scrapped the mandatory three-year existence criterion for deep tech startups seeking financial assistance of up to ₹1 crore under the Industrial Research and Development Promotion Programme (IRDPP). Earlier, startups had to demonstrate sustainability and operational viability to become eligible for such support.
The move marks a significant recalibration of how the Indian government evaluates early-stage deep tech innovation, shifting focus away from corporate longevity toward technological merit and readiness.
Calling the decision a catalyst for accelerating India’s deep tech ecosystem, Union Minister for Science and Technology Jitendra Singh highlighted the government’s intent to back innovation earlier in a startup’s lifecycle.
“The lifting of the three-year existence requirement is a significant incentive to help deep tech startups scale faster, even before they are fully on their own,” Singh noted.
Why Early Access to Capital Changes Everything
For deep tech investors, the removal of the three-year clause addresses a long-standing bottleneck. Vishal Kataria, vice president at Ankur Capital, told AIM that early-stage deep tech startups often struggle due to a lack of translational funding during the TRL 1-3 phase.
Technology Readiness Levels (TRL) 1-3 describe the earliest stages of technology development, from basic principles to proof of concept.
“Relaxing the three-year existence requirement for DSIR recognition will enable startups to move quickly from R&D to a real-world prototype,” he said. Kataria added that speed at this stage is not just operationally critical, but also a strong signal when startups later raise equity capital. “It recognises that the pace of innovation need not be coupled with any externally enforced timeline.”
Policy advisors see the change as more than a procedural tweak. Parishrut Jassal, advisor at AI think-tank Future Shift Labs, described the move as a structural pivot in India’s innovation trajectory toward genuine technological sovereignty.
Jassal, who is also the founder of public sector-facing GovernAI, noted that the earlier viability clause often filtered out the most transformative ideas simply because they were too early. “By allowing early-stage startups to access DSIR recognition and fiscal incentives from day one, the new guidelines bridge the valley between in-lab proof-of-concept and market entry,” he explained, calling it a shift from a “compliance-first” to a “competence-first” evaluation model.
He also highlighted the importance of platforms such as the PRISM Network Platform (TOCIC Innovator Pulse), which he believes can convert fragmented innovation efforts into a cohesive national pipeline. Meanwhile, initiatives like Creative India 2025, which aim to establish India as a global hub for content creation, provide a roadmap to ensure that cutting-edge research translates into industrial patents and commercial outcomes.
For founders building at the frontier of deep technology, the implications are immediate and tangible. Vinay Chataraju, co-founder at Kritsnam Technologies, believes that “it shifts the focus from ‘vintage’ to ‘merit,’ ensuring early-stage innovators access critical funding and fiscal incentives when they need them most.” Vikram Jayaram, founder and CEO of Neuralix AI, called the decision a transformative moment for India’s deep tech ecosystem. “This policy shifts the paradigm from survival to acceleration,” he told AIM, adding that access to IRDPP funding at an earlier stage can dramatically change a startup’s trajectory.
“Deep tech startups aren’t like typical software businesses. They require longer development cycles, heavy R&D investment, and early validation long before revenue or three years of operations,” he added.
Jayaram asserted the move sends a powerful signal of trust in Indian innovators. For startups like Neuralix, early access to funding could accelerate prototype development, validate industrial use cases, and attract strategic partners without waiting for arbitrary timelines to expire.
More broadly, he sees the decision as evidence of India’s growing confidence in its own scientific and engineering capabilities. “This isn’t just a policy tweak, it’s a vote of confidence in Indian science, engineering, and entrepreneurship,” he said, adding that it could catalyse global IP creation, job growth, and long-term societal impact.
DSIR’s New Role
At DSIR’s foundation day celebrations, Jitendra Singh also asserted that effective research outcomes increasingly depend on early collaboration with industry. To encourage this, DSIR now offers financial incentives, such as customs duty exemptions, to strengthen partnerships with industry players, MSMEs, and startups.
The announcement also highlighted a broader cultural shift underway within India’s innovation ecosystem. Singh pointed to growing inclusivity, noting that more than 10,000 women have benefited from DSIR schemes, including over 55 women-led self-help groups.
From a strategic standpoint, the policy change aligns with broader national ambitions on technology sovereignty. Speaking at the event, principal scientific advisor Professor Ajay Kumar Sood underlined the importance of owning critical technologies in an increasingly fragmented geopolitical environment.
He referenced the ₹1 lakh crore Research, Development and Innovation Fund, stressing the need to push scientific breakthroughs in private-sector R&D from laboratories to markets, particularly at TRL 4 and above.
Sood also drew attention to structural mechanisms such as the National Technology Readiness Assessment Framework, designed to bring greater objectivity to technology evaluation, alongside initiatives like Manthan and Uthaan that aim to drive demand-led innovation and expand participation from tier-2, 3 institutions.
However, the union minister cautioned that, despite enhanced access to capital, deep tech startups would still be subject to appropriate evaluation standards linked to technological maturity. But if executed well, this shift could help position India not merely as a consumer of advanced technologies but as a primary laboratory for indigenous, globally competitive solutions.
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